Automatic and Government Approval Route of FDI

Automatic Route of FDI

FDI under the automatic route does not require prior approval either by the Government of India or the Reserve Bank of India (RBI). Investors are only required to notify the concerned Regional Office of RBI within 30 days of receipt of inward remittances and file required documents with that office within 30 days of issue of shares to foreign investors.

FDI up to 100% is allowed under the automatic route in all activities/sectors except the following which require approval of the government:
  • Activities/items that require an Industrial Licence
  • Proposals in which the foreign collaborator has an existing venture/tie up in India in the same field
  • Proposals for acquisition of shares in an existing Indian company in some cases
  • All proposals falling outside notified sectoral policy/caps or under sectors in which FDI is not permitted

Government Approval Route

All activities which are not covered under the automatic route, require prior Government approval.